The FTSE 100 index has closed 52 points, or 0.7 per cent down at 7,053 as political uncertainty is weighing on sentiment.

Markets in Europe also were in the red, with Germany's DAX down 1.7 per cent and France's CAC 40 down nearly 1 per cent.

Today's biggest loser on the Footsie was British American Tobacco, with shares falling more than 10 per cent after media reports that the US Food & Drugs Authority may be looking to ban menthol cigarettes.

Meanwhile, shares of miners and oil companies were in demand thanks to a bounce back in oil prices. The price of Brent rose 1.5 per cent to above $71 a barrel after Saudi Arabia said it would cut production next month.

16:49

And the pound is falling again

After a short-lived rebound above $1.29, the pound is now trading down 0.8 per cent at around $1.285 due to uncertainty around Brexit.

The EU's Brexit negotiator Michel Barnier said earlier that a Brexit text was ready.

Then a spokesperson for Theresa May said that progress is being made in relation to negotiating with her own cabinet.

16:13

Apple shares fall after iPhone supplier Lumentum slashes forecasts

Apple shares have fallen to their lowest in more than three months after Lumentum – which provides technology for the smart phone maker - slashed its revenue and profit forecasts.

Lumentum confirmed that 'one of its largest' customers 'materially' reduced shipments. And although it did not say the name of the company, traders are drawing their own conclusions.

Apple shares are down 4.5 per cent at $195, while Lumentum shares have crashed 30 per cent to $38.

16:07

Meanwhile in Europe...

... stock markets are in the red heading into the close as political uncertainty is weighing on sentiment, with the Italian government set to send their revised budget proposal to the EU tomorrow.

David Madden at CMC Markets UK said that, however, the Italian coalition government seemd likely to stick to their guns.

'Lega and the Five Star Movement were voted into power for many reasons, and jolting the economy out of its stagnant state was one of them. If the EU press too hard, they could risk sparking another round of the eurozone debt crisis.'

16:01

Pound rebounds as Brexit Treaty text is ready

Fiona Cincotta at City Index comments:

'We expect the pound to trade a volatile path over the next 36 hours as Theresa May presents the Brexit treaty to her cabinet. The outcome of Brexit depends on Theresa May’s ability to win support.

'Signs that she is able to draw her cabinet together behind her and the Brexit deal could see sterling push through $1.30 before opening the door to $1.3150. Failure by May to get the Brexit deal through could see sterling dive back towards $1.27 resistance tested at the end of October.

'With so much attention on Brexit, traders are only expected to give UK jobs data on Tuesday a brief glance, even though UK average weekly earnings are expected to ramp up to 3% for the three months to September. This would be a solid increase from 2.7% the previous month.'

14:44

Wall Street opens lower

US stocks opened lower as a slide in Apple after weak forecasts from two of its suppliers and losses in tobacco companies offset early gains from a rebound in oil prices.

The Dow Jones is down 0.5 per cent at 25,850 shortly after the open, the S&P is down 0.9 per cent at 2,781, while the tech-heavy Nasdaq is down 1.3 per cent at 7,306.

14:36

Volatile day for the pound as it rebounds above $1.29

The pound has now come off its lows, rising above $1.29, after having hit $1.283 this morning.

But the Footsie is still in the red, down 0.4 per cent at 7,073.

13:17

Footsie extends losses; BAT shares down nearly 10%

The FTSE 100 is down 0.4 per cent, or 29 points at 7,076 and the pound is still down 0.7 per cent against the dollar at $1.28.

British American Tobacco shares are down nearly 10 per cent after media reports that the US Food & Drugs Authority may be looking to ban menthol cigarettes.

Analysts reckon British American Tobacco generates some 20-25% of group profits from US menthol, thanks to its dominant Newport brand, so this would be a major blow.

The FDA is also said to be considering a ban on certain types of flavoured e-cigarettes, potentially undermining recently launched BATS brands such as Vype and Vuse.

Nicholas Hyett at Hargreaves Lansdown commented: 'Along with cigarette volumes shrinking, regulation is the other inevitable fact of the tobacco industry.

'The acquisition of Reynolds gave BATS a dominant position in US menthol. That’s a segment that’s been in regulators’ sights for some time – thanks to its perceived status as a gateway for new smokers. The FDA are now said to be considering banning them altogether.

'While many menthol smokers would likely move over to non-menthol products, it would still be a major blow.'

Source: Google

13:08

Johnston Press shares up 14% as Daily Mail owner could buy its i newspaper

Shares in newspaper publisher Johnston Press are up 14 per cent after reports at the weekend that Daily Mail General Trust could be looking to buy its 'i' newspaper.

Johnston Press, the publisher of The Scotsman, The Yorkshire Post and 'i', put itself up for sale in October.

Sky News said DMGT s drawing up plans to make an offer for the 'i', a sister title of the Independent which was sold to Johnston Press for £24million in 2016.

12:51

Fishing Republic future 'in significant doubt'

Sinking angling company Fishing Republic has warned that its future is in 'significant doubt' as it scrambles for emergency funding.

Shares in the company, which has 14 stores in the UK and employs 115 people, were suspended from trading last month.

And Daniel Quinn, the former commercial director of Go Outdoors, had been drafted in as chief executive to lead the turnaround of the troubled business but he then backed out.

The retailer said in a statement today: 'Fishing Republic announces that, further to the notification by the Company on 16 October 2018, the Directors have been working with the Company's professional advisers to asses a number of options for the future of the Group. There does, however, remain a material uncertainty regarding the Group's financial position, and the Group continues to trade only with the short-term support of key creditors.

'The Company is currently seeking to raise equity finance to fund its immediate and future working capital requirements. If the Company fails to raise sufficient equity finance and no other funding becomes available, then there will be a significant doubt as to the Group's ability to continue to trade as a going concern.'

11:47

Footsie falls into the red

After a positive start, the FTSE 100 has now dipped into the red, falling 9 points, or 0.13 per cent, to 7,096.

British American Tobacco and Imperial Brands remain the biggest fallers, down 9 per cent and 4 per cent respectively.

Miners however are on the rise, with Rio Tinto up 3.4 per cent and BHP up 3 per cent. Oil companies BP and Shell are also up by about 1.6 per cent thanks to a rebound in oil prices.

Source: Google

11:25

IAG reportedly seeking help from Spain amid Brexit worries

International Airlines Group, the owner of British Airways and Iberia, is reportedly in talks with the Spanish government to be considered a Spanish company in case of a no-deal Brexit.

IAG is said to have been in talks with the Spanish government since at least last month to help it retain its European status, according to reports in Spanish newspaper El Pais.

If the UK leaves the EU without a deal, IAG's status as an European carrier could be at risk. Under current rules, an airline must be more than 50 per cent EU owned and controlled to be considered European.

11:11

Saudi Arabia needs Russia support, says analyst

Neil Wilson of Markets.com says Saudi Arabia will need co-operation from other members of OPEC to cut production, as well as Russia, which however does not seem keen to do so.

'Saudi Arabia has announced a cut to December crude output, a sign that it’s prepared to curb production to stem the decline in oil prices. The country will pump 500,000 barrels a day fewer next month than it has been in November.

'Brent rallied from 7-month lows at just above $69 to trade above $71.50. Having found support at $59.30, US crude has firmed to $61 but is struggling hold that handle.

'In the short term this is a positive for oil, but we must question the impact longer term unless it’s the sign of more to come from OPEC. Saudi Arabia cannot act alone though – realistically it needs to pull together OPEC allies and, critically, Russia to curb production if it wants prices to hold. The language from Russia suggests it is not ready to follow the Saudis yet.'

Saudi Energy Minister Khalid al-Falih (right)

10:53

FTSE 100 outperforms European indexes but FTSE 250 falls

The Footsie is outperforming European indexes, rising 0.4 per cent to 7,132, as Brexit worries have sank the pound, giving a boost to stocks with foreign revenues in dollars.

The UK bluechip index was also helped by oil giants like BP and Royal Dutch Shell, which were boosted by a 1.5 per cent rise in oil prices after Saudi Arabia said it would cut supply next month.

John Wood Group, an Aberdeen-based multinational energy services company, was also among the biggest risers today after it said it landed three new contracts in the United Arab Emirates.

However the FTSE 250, which is seen as more exposed to the impact of Brexit, is down 0.6 per cent at 18,987.

10:39

Funeral firm Dignity sees profits fall

Dignity has reported falling profits as an escalating price war in the funeral sector continues to take its toll.

The funeral firm, which competes with the Co-op funeralcare, said that underlying operating profit fell 14 per cent to £68.6million in the 39-week period to September 29 on flat revenue, despite deaths rising 3 per cent.

Shares in Dignity are down more than 5 per cent this morning.

The £2billion a year funerals market is facing an investigation by regulators. There are fears that families are being charged too much when laying loved ones to rest.

Data compiled by financial services group Royal London indicates that the average price of a funeral is now around £3,800, although extras can push this closer to £6,000.

Dignity recently launched its new 'simplicity cremations,' which come with a price tag of less than £2,000.

James Dunn, co-founder of funeral comparison website Beyond, said: 'The provider, which is in the middle of a restructuring, has historically reaped the rewards of an incredibly uncompetitive market.

'Despite targeting price reductions, Dignity is still very much overpriced when compared to your typical independent business. The average funeral director fee of chains - such as Dignity - is still 56% higher than that of independents.'

10:18

Babcock hits back at 'false and malicious' report

Engineering group Babcock has hit back at accusations by a secretive research firm, saying it continued to be in good financial health and in good relations with the UK Government, its largest customer.

The FTSE 250 firm, which works on UK military aeroplanes and naval bases, said that a recent report by 'untraceable' Boatman Capital Research was 'false and malicious'.

The report, issued in mid-October, alleged that Babcock had 'systematically misled investors by burying bad news about its performance' and also that the firm's relations with the Ministry of Defence were 'terrible'.

The Restaurant Group, the owner of Frankie & Benny's, has said it plans to raise £315million through a discounted rights issue to fund part of its acquisition of Wagamama.

The Restaurant Group is buying the pan-Asian restaurant chain from its private equity owners Duke Street and Hutton Collins.

The group announced the deal on 30 October, and investors were not impressed, with shares crashing 14 per cent. Today shares are down 3 per cent at 244p.

Russ Mould, investment director at AJ Bell, said this meant management has not been dissuaded by a negative market reaction to the transaction.

‘In one sense this is reassuring. If its faith in the takeover was sufficiently shaky that it could be put off purely by investor sentiment it would suggest there wasn’t much substance behind the move.

‘However, it ramps up the pressure on the eateries firm to get the deal right against a weak consumer backdrop and in an arguably over-saturated casual dining market.

‘A change in guidance, suggesting the acquisition will be modestly dilutive of earnings rather than accretive in the first full year of ownership, is not a great start.'

09:21

Oil price rises

Oil prices jumped after Saudi Arabia said it would cut supply next month, with other producers also considering reductions next year.

The price of Brent Crude rose 1.6 per cent to $71.33 a barrel today.

09:14

Tobacco companies shares fall after news of ban on menthol cigarettes

British American Tobacco and Imperial Brands are the biggest fallers after reports that the US Food and Drug Administration plans to pursue a ban on menthol cigarettes.

BAT shares are down 8 per cent at £30.4, while Imperial Brands shares are down 2.8 per cent at £26.7.

09:03

'Dollar strength story' as greenback hits 16-month high

Neil Wilson at Markets.com comments on the pound's moves: 'Sterling remains under pressure with cable firmly below 1.29. A move back to 1.26610, the August low, looks possible should Brexit news flow be negative.

'Of course we do see some impact from the general Brexit uncertainty, indeed the runes look increasingly pessimistic as far as getting a deal done by December 14th is concerned. Theresa May looks increasingly squeezed on all sides. Ministers are resigning, Brussels is not playing nice (as ever) and the overall picture is not encouraging. The Irish border question remains intractable.

'But above all this is a dollar strength story. The shakeout from the midterms and the robust Fed signalling has unleashed some pent-up dollar demand, pushing the dollar index to a 16-month high.'

08:58

Diageo sells 19 drinks brands in $550m deal

Diageo has agreed to sell 19 brands including Parrot Bay rum to US firm Sazerac in a $550million (£428 million) deal.

Proceeds - expected to be about £340 million on a net basis - will be returned to investors through a share buyback.

The pound is down nearly 1 per cent against the dollar as there is growing concern over whether Theresa May can deliver a Brexit deal, after reports that several ministers are considering resignation over stalled negotiations.

The pound is down 0.9 per cent against the dollar at $1.285, with the dollar hitting a 16-month high. Against the euro, sterling is down 0.2 per cent at €1.14.

The FTSE 100, however, has opened higher and is now trading up 0.25 per cent at 7,123.